IDS’s Manifesto Council/HA Home Giveaway Unlikely to be Practical

See here in Times

Two reasons practical and one political.

1)  You could just rent out your old council home and claim housing benefit on a new rented home.  What economists call arbitrage.  The only solution would be to bar all individuals who get free council houses from claiming HB ever again.  But housing benefit info is held on local databases, and a national system to make this enforceable (universal credit) seems years away.  Probably why number 10 opposes as i’m sure the plan is to quietly dump IDS and universal credit after the election.  The other solution would be to grant a national housing benefit availability card which you lose if the house is returned. ID cards redux.

2) It would bankrupt HAs who are leveraged to the hilt on the assumption of future HB funded revenue streams.  The hidden IDS assumption seems to be local authorities now all run a surplus on their housing revenue accounts and have paid off all debt, heroic and even more so for housing associations.  The only solution would be to compensate them which would make the scheme cost billions – it would not be revenue neutral.

3) Opponents would claim the tax payer is funding giveaways to those who were on benefits rather than those who have been the working poor.  Yet to extend the scheme to all tenants would be unaffordable.

As David Orr says ‘bonkers’, but im sure Lyndon Crosby will get some kind of similar  scheme in the Tory Manifesto which would be politically hard to counter.

There is a germ of an idea here which could be applied on the left.

Which is that the social house, but the ground rent (land) was given to all tenants and all tenants were charged a fee or tax on the ground rent which would be used to pay off housing debt and pay for all housing related benefits.  This ground rent would not be charged to those on fixed incomes such as pensioners.  This ground rent would replace current social housing rents rents and housing related benefits.    Tenants would still pay maintenance fees to housing landlords but could opt out and take the maintenance burden themselves. All homes would have a charge on the land and 50% of housing value upliflits would be recycled to new social housing construction.New house owners could also purchase the ground rent based on the outstanding debt burden on the land and the proportion their own past rents has amortized this. Tenants could also opt for this to be automatic granting the house owner the land at the point of retirement or after say 30 years of tenancy.

This would bring the principles of contributions based national insurance into the social housing sector.

This could be spun as giving you automatically a certain number of ‘bricks per year’ of a council/HA home until you own it as of right.


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